Virgin Atlantic slices daily capacity by 80%; grounds upto 85% fleet as Covid-19 wreaks havoc

Mar 17, 2020: Virgin Atlantic has put drastic measures in place to ensure cash is preserved, costs are controlled, and the future of the airline is safeguarded in the wake of the Covid-19 outbreak, which has led to a sharp and continual drop in demand for flights across the airline’s network.

Given the unprecedented circumstances and the severity of the outlook, the airline has reduced its schedule, prioritising core routes based on customer demand. This change amounts approximately 80 percent reduction in flights per day by 26 March. As a direct consequence, the airline will be parking approximately 75 percent of its fleet by 26 March, and at points, in April will go up to 85 percent.

Owing to restrictions to international travel, the airline is reducing services to focus on core routes, depending on customer demand. This will be subject to constant review as the situation evolves. “Our London Heathrow – Newark route will be permanently terminated with immediate effect. As a direct result of this action the airline will need to further reduce its cost base. Staff will be asked to take eight weeks unpaid leave over the next three months, with the cost spread over six months' salary, to drastically reduce costs without job losses. The airline is grateful to have the support of BALPA and UNITE and the workforces they represent in agreeing to support unpaid leave, alongside other extensive measures,” the airline said in a statement.

Offering a one-time voluntary severance package to all employees, the airline is offering a sabbatical of 6-12 months, deferring annual pay increases until review in January 2021, reducing employer pension contribution for a period of one year, continuing to offer an enhanced company sick pay policy. Also, the airline’s CEO Shai Weiss has extended his pay cut to the end of 2020, with the Executive Leadership Team agreeing a decrease of 15 percent fo percent for the same period.

Furthermore, Virgin Atlantic has appealed to the government for clear, decisive and unwavering support for the UK aviation sector, comprising:

▪ Emergency credit facilities to a value of £5-7.5bn, to bolster confidence in the industry, and to prevent credit card processors from withholding customer payments.

▪ Slot alleviation for the full summer 2020 season, enabling airlines to match supply to demand – reducing costs and preventing unnecessary flying and corresponding CO2 emissions.

Commenting on the current situation, Virgin Atlantic spokesperson said, “The aviation industry is facing unprecedented pressure. We are appealing to the government for clear, decisive and unwavering support. Our industry needs emergency credit facilities to a value of £5-7.5bn, to bolster confidence and to prevent credit card processors from withholding customer payments. We also need slot alleviation for the full summer 2020 season, so we can match supply to demand – reducing costs and preventing unviable flying and corresponding CO2 emissions. With this support, airlines including Virgin Atlantic, can weather this storm and emerge in a position to assist the nation’s economic recovery and provide the passenger and cargo connectivity that business and people across the country rely on.”